Monetary & Financial Economics

Investigation housing rental bubble and factors affecting it in Iran: Evidence from the Kalman filter and ARDL approaches

Articles in Press

Document Type : Original Article

Authors

faeze afzali 1
Ali Akbar Naji Meidani 2
Hadi Esmaeilpour Moghadam 3

1 Department of Economics of Faculty of Economics and Administrative sciences, Mas

2 ferdowsi

3 Assistant professor, Department of Economics of Faculty of Economics and Administrative sciences, Ferdowsi University of Mashhad, Iran

https://doi.org/10.22067/mfe.2025.90554.1465
Abstract
One of the most fundamental sectors in economic and social development planning is housing. One of the most important challenges facing the housing market is the existence of speculation in this market, which leads to a market bubble and, as a result, imposes high costs on society. The main objective of this research is to investigate the housing rental bubble and its influencing factors in Iran during the period 1990-2024. Therefore, first, using the Kalman filter, the rent bubble is calculated, and then the factors affecting it are analyzed using the ARDL approach. Findings from the estimation of the housing rent bubble showed that a significant portion of the housing rent changes in this period were not only due to changes in fundamental variables but also due to the formation of a price bubble, so that since 2019, due to increasing inflation, decreasing people's purchasing power, and increasing rents, the amount of the housing rent bubble has increased. The results of the ARDL approach also showed that in the long run, real liquidity and the unofficial exchange rate have a positive and significant relationship with the housing rental bubble. In addition, the results indicate that GDP per capita, unemployment rate, and bank interest rate have a negative relationship with housing rent bubbles in the long run. This study emphasizes the government's influence on the housing market through monetary policy with liquidity and interest rate instruments. Therefore, authorities should pay attention to the effects of monetary policy on the housing market.

Keywords

Housing rent bubble
average housing price
Kalman filter
Iran
Subjects
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Monetary & Financial Economics

Articles in Press, Accepted Manuscript
Available Online from 16 April 2025

  • Receive Date 31 October 2024
  • Revise Date 11 January 2025
  • Accept Date 12 April 2025

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